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PERT

CPM vs. PERT


In 1957 the Critical Path Method (CPM) was
developed as a network model for project
management.
It is a deterministic method that uses a fixed
time estimate for each activity.
While CPM is easy to understand and use, but
does not consider uncertainty in activity time
estimation.
Uncertainty : weather, equipment failure,
absenteeism can have a great impact on the
completion time of a complex project.

PERT
The Program Evaluation and Review
Technique (PERT) is a network model that
allows for randomness in activity
completion times.
Generally used when there is a risk of time
associated with project.
R & D projects where correct time
determinations cannot be made.
Example : Project on launching the spacecraft.

PERT
PERT was developed in the late 1950's for
the U.S. Navy's Polaris ballistic missile
system project having thousands of
contractors.
This project was notable in that it finished
18 months ahead of schedule and within
budget.
It has the potential to reduce both the time
and cost required to complete a project.

PERT
This method uses statistical tools for
Implication of uncertainties on project time
Or
Stochastic Modeling of Network
A distinguishing feature of PERT is its
ability to deal with uncertainty in activity
completion times.
For each activity, the model usually
includes three time estimates:

Three Time Estimates


2

1-6-23

4-7-16
4

2-5-10

1
2-5-12
3-7-20
3

Optimistic (to)-Most Likely tl-Pessimistic tp

Times
Optimistic time Shortest possible time in which an
activity can be completed under ideal conditions.
This is denoted by to
Pessimistic time - the longest time that an activity
might require. If everything went wrong and
abnormal situation prevails.however, it doesn'tt
include highly unusual catastrophies such as
earthquake, floods, fires. It is denoted by t p
Most likely time (Most Frequent-Mode)- the
completion time having the highest probability.
Normal condition prevails. It is denoted by t L

t0

tm

tp
2

1-6-23

4-7-16
4
1
2-5-12
3-7-20
3

2-5-10

Problem: 54 trenches of same dimensions by different parties


Find :Optimistic, Pessimistic & Most Likely Times
Times of Completion of Trench (Days)
8

11

14

10

10

12

11

10

12

13

11

10

10

10

11

14

13

14

11

16

10

13

10

12

12

11

13

16

11

15

15

15

17

14

12

12

10

13

11

Optimistic & Pessimistic Time


Times of Completion of Trench (Days)
8

11

14

10

10

12

11

10

12

13

11

10

10

10

11

14

13

14

11

16

10

13

10

12

12

11

13

16

11

15

15

15

14

12

12

10

17
17
13

11

Most Likely Time


Days of
Completion

No. of trenches
completed during
these days

Days of
Completion

No. of trenches
completed during
these days

Most Likely Time


Days of
Completion

No. of trenches
completed during
these days

Days of
Completion

No. of trenches completed


during these days

12

13

14

15

10

16

11

17

Draw the Graph


No. of days vs. No. of Trenches

Number of Trenches

Tallest peak of the curve- Most Likely time or Mode

To = 6

TL = 10
Number of Days

To = 17

Most Likely Time

Tallest peak of the curve- Most Likely time or Mode

Expected Time & Standard


Deviation: Beta Distribution
Te= Expected time : Time corresponding 50 % probability of performance

Te= Expected time = ( Optimistic + 4 x Most likely + Pessimistic ) / 6

Expected Time & Standard


Deviation: Beta Distribution
SD: How tightly a set of values is clustered around the mean.
Standard Deviation: Sigma: measure of uncertainty = (b-a)/6

Calculate Expected Time &


Standard Deviation:

Calculate Expected Time &


Standard Deviation
Activity

to

tm

tp

16

23

Comment on Standard Deviation:

Second case measure of


dispersion is higher

For the following net work having four activities in series determine
the expected time. The optimistic, most likely and pessimistic times
are noted on the activities.
Find the total expected time : tE

6-7-8

7-8-12

5-11-13 4

3-4-7

Activity

to

tL

tp

tE

1-2
2-3
3-4
4-5

6
7
5
3

7
8
11
4

8
12
13
7

7
8.5
10.33
4.33

Hence total expected time tE = 7.0+8.5+10.33+4.33 = 30.16

Determine the Expected time for


Each Path & Find the critical Path
5-7-10

2-5-9

12
9-

5-7-9

11-14-17

6-11-17

12
86-

11
-1
420

15

791

4-6

5-6-9

2-4-7

10

Path A
Path B
Path C
Path D

1-2-5-8-10
1-2-5-7-10
1-3-7-10
1-4-6-9-10

Activity

Optimistic
time to

Most likely
time tL

Pessimistic
time tp

Expected
time tE

1-2
1-3
1-4
2-5
3-7
4-6
5-7
5-8
6-9
7-10
8-10
9-10

7
5
6
5
11
5
4
2
2
6
9
11

9
7
8
7
14
6
6
5
4
11
12
14

13
9
12
10
17
9
9
9
7
17
15
20

9.33
7.0
8.33
7.16
14.0
6.33
6.16
5.16
4.16
11.16
12.0
14.5

tE for Path 1-2-5-8-10 = 9.33 + 7.16 +


5.16 + 12.0 = 33.65
tE for Path 1-2-5-7-10 = 9.33 + 7.16 +
6.16 + 11.16 = 33.81
tE for Path 1-3-7-10 = 7.0 + 14.0 + 11.6 =
32.16
tE for Path 1-4-6-9-10 = 8.33 + 6.33 +
4.16 + 14.5 = 33.32
From the above calculation it can been seen that path 1-2-5-7-10
take the maximum time to reach the event 10 from event (1) i.e.
tE = 33.81 units of time. Hence it is the critical path.

Determine the Expected time for


Each Path & Find the critical Path
2

4-8
-

11
8
61

3-7-9

8-10-12

5812

14

8-10-12

5710

7-10-15

3-5-6
4

4-68
5

Critical Path
Path

Activity

tO

tL

tP

tE

tE

1-2
2-7
7-8

6
8
5

8
10
8

11
12
12

8.17
10.00
8.17

26.34

1-2
2-6
6-8

6
4
7

8
8
10

11
14
15

8.17
8.33
10.33

26.83

1-3
3-6
6-8

3
8
7

7
10
10

9
12
15

6.67
10.00
10.33

27.00

1-4
4-5
5-6
6-8

5
4
3
7

7
6
5
10

10
8
6
15

7.17
6.00
4.83
10.33

28.33

Probability of Meeting The


Schedule Date
50 %
Probability

Normal Distribution Function


Sum of all expected time of all activities along
critical path is equal to the expected time of last
event= 50 % time of completion of project
Though individual activities assume
random( beta distribution) but TE of the project
as a whole assume normal distribution

Normal Distribution Function

Normal Distribution Function

Normal Deviate
(x): Distance from
the mean
expressed in
terms of sigma
1. Normal Deviate = 0, it is
the expected time,
probability of completion
= 50 %
2. Normal Deviate = 1,
probability of completion
= 84 %.
3. Normal Deviate = -1,
probability of completion
= 16 %

Normal Deviate
(+)

Probability
(%)

Normal Deviate
(+)

Probability
(%)

0
-0.1
-0.2
-0.3
-0.4
-0.5
-0.6
-0.7
-0.8
-0.9
-1.0
-1.1
-1.2
-1.3
-1.4
-1.5
-1.6
-1.7
-1.8
-1.9
-2.0
-2.1
-2.2
-2.3
-2.4
-2.5
-2.6
-2.7
-2.8
-2.9

50.0
46.0
42.1
38.2
34.5
30.8
27.4
24.2
21.2
18.4
15.9
13.6
11.5
9.7
8.1
6.7
5.5
4.5
3.6
2.9
2.3
1.8
1.4
1.1
0.8
0.6
0.5
0.3
0.3
0.2

0
+0.1
+0.2
+0.3
+0.4
+0.5
+0.6
+0.7
+0.8
+0.9
+1.0
+1.1
+1.2
+1.3
+1.4
+1.5
+1.6
+1.7
+1.8
+1.9
+2.0
+2.1
+2.2
+2.3
+2.4
+2.5
+2.6
+2.7
+2.8
+2.9

50.0
54.0
57.9
51.8
65.5
69.2
72.6
75.8
78.8
81.6
84.1
86.4
88.5
90.3
91.9
93.3
94.5
95.5
96.4
97.1
97.7
98.2
98.6
98.9
99.2
99.4
99.5
99.7
99.7
99.8

Z = Normal Deviate
If Ts is the scheduled time of completion
& Te is the expected time of completion
Z = Ts-Te/sigma
Sigma = (Sum of variances along critical path)0.5
Variance = (tp-to/6)2

Problem:
Expected Project Length is 50 weeks
Variance 16
How many weeks required to complete the
project to complete with
95 % Probability
75 % probability
40 % Probability

57 weeks
53 weeks
49 weeks

A project is expected to be completed in 28 days along the


critical path and has a standard deviation of 4days. Find the
probability of completing the project with in
(a) 28 days (b) 32 days and 24 days.

Earliest expected time TE = 28 days


Standard deviation = 4
For project to be completed in 28 days i.e. TS = 28,

From the probability table, for Z = 0,


probability = 50%

Find The probability of completion


within 35 days
2
472

18
9
6-

4-7
-1

4-10-22

4
581

16
7
4-

-8
2-5

Find The probability of completion


within 35 days
2
7

10

4
9

11

3
SD= 4.69
Probability 85 %
Critical path 1-2-4-5, Te= 30

Variance 1-2= (18-6/6)2 =4, + 9 + 9 = 22

Draw the AON Network, Find the


longest path and Calculate the Slacks
Activity
A
B
C
D
E
F
G
H
I
J
K

Description
Develop product specifications
Design manufacturing process
Source & purchase materials
Source & purchase tooling & equipment
Receive & install tooling & equipment
Receive materials
Pilot production run
Evaluate product design
Evaluate process performance
Write documentation report
Transition to manufacturing

Immediate Duration
Predecessor (weeks)
None
4
A
6
A
3
B
6
D
14
C
5
E&F
2
G
2
G
3
H&I
4
J
2

AON Diagram

Find the Project Completion


Time- Critical Path

Paths
ABDEGHJK
ABDEGIJK
ACFGHJK
ACFGIJK

Path duration
40
41
22
23

The longest path (ABDEGIJK) limits the


projects duration (project cannot finish in
less time than its longest path)
ABDEGIJK is the projects critical path

Calculate Slack

Calculating Slack
Activity
A
B
C
D
E
F
G
H
I
J
K

Late
Finish
4
10
25
16
30
30
32
35
35
39
41

Early
Finish
4
10
7
16
30
12
32
34
35
39
41

Slack
(weeks)
0
0
18
0
0
18
0
1
0
0
0

Probabilistic Time Estimates : Estimate


the Project Duration and Probability of
completion of project within 48 weeks
Activity
A
B
C
D
E
F
G
H
I
J
K

Description
Develop product specifications
Design manufacturing process
Source & purchase materials
Source & purchase tooling & equipment
Receive & install tooling & equipment
Receive materials
Pilot production run
Evaluate product design
Evaluate process performance
Write documentation report
Transition to manufacturing

Optimistic
time
2
3
2
4
12
2
2
2
2
2
2

Most likely
time
4
7
3
7
16
5
2
3
3
4
2

Pessimistic
time
6
10
5
9
20
8
2
4
5
6
2

Calculate Te
Activity
A
B
C
D
E
F
G
H
I
J
K

Optimistic
time
2
3
2
4
12
2
2
2
2
2
2

Most likely
time
4
7
3
7
16
5
2
3
3
4
2

Pessimistic
time
6
10
5
9
20
8
2
4
5
6
2

Expected
time
4
6.83
3.17
6.83
16
5
2
3
3.17
4
2

Calculate the Project Duration


Activities on paths
ABDEGHJK
ABDEGIJK
ACFGHJK
ACFGIJK

Expected duration
44.66
44.83
23.17
23.34

ABDEGIJK is the expected critical path &


the project has an expected duration of
44.83 weeks

Adding LS and LF to Network

Example: Calculate the probability of


finishing the project in 48 weeks
Use the z values in Appendix to determine probabilities
e.g. probability for Critical Path
48 weeks 44.83 weeks
z

4.96

1.42

Path
Number

Activities on
Path

Path
Variance
(weeks)

z-value

Probability
of
Completion

A,B,D,E,G,I,J,K

4.96

1.4215

0.9222

Benefits of PERT
PERT is useful because it provides the following
information:
Expected project completion time.
Probability of completion before a specified date.
The critical path activities that directly impact the
completion time.
The activities that have slack time and that can lend
resources to critical path activities.

Limitations
The activity time estimates are somewhat subjective and
depend on judgement.
In cases where there is little experience in performing an
activity, the numbers may be only a guess.
Even if the activity times are well-estimated, PERT
assumes a beta distribution for these time estimates, but
the actual distribution may be different.
If other paths can become the critical path if their
associated activities are delayed, PERT consistently
underestimates the expected project completion time.

CPM -PERT
CPM

PERT

CPM uses activity oriented network.


Durations of activity may be
estimated with a fair degree of
accuracy.
It is used extensively in construction
projects.

PERT uses event oriented Network.


Estimate of time for activities are not
so accurate and definite.

It is used mostly in research and


development projects, particularly
projects of non-repetitive nature.
Deterministic concept is used.
Probabilistic model concept is used.
CPM can control both time and cost PERT is basically a tool for planning.
when planning.
In CPM, cost optimization is given In PERT, it is assumed that cost
prime importance. The time for the varies directly with time. Attention is
completion of the project depends therefore given to minimize the time
upon cost optimization. The cost is so that minimum cost results. Thus in
not directly proportioned to time. PERT, time is the controlling factor.
Thus, cost is the controlling factor.